I feel this way as well. Watching those videos/viewing those pictures was DOING something, so saying he never did anything is untrue. Who are the victims? The children in the videos, most definitely. But also his wife-he was unfaithful to her. His children-he betrayed their trust. And who knows how many other children that he has looked at and had sexual thoughts about. Just because those thoughts aren't public doesn't mean he hasn't victimized them already in his mind. He should be on the sex offender registry and his deeds should be known.
That said, we are dealing with a similar situation in our family-DH's brother is currently in prison for child molestation. I'm generally a believer in Jesus and repentance and people's ability to change and start over, but honestly I'm not sure how I will feel when he is released. MIL continually reminds us that we need to find a way to be ok with having him around after he has done his time. Well, I will be kind and friendly to him but I can tell you right now that he will NEVER be alone with my children. I would feel the same about someone who had 'just' done porn and 'nothing else'. Same thing, in my book.
I guess I wouldn't care if he drove his own son to Scout camp, dropped him off and left without any contact with any other child, but that's about all the leeway I would consider.